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If the U.S Dollar can put in a solid “swing low” and reversal down here ( which it appears to be doing ) then it looks like a number of solid trades setting up, with well-defined risk – having that stops can be put just above or / below any number of USD related pairs such as:

short EUR/USD with “stops above” 1.39 ( that’s only 30 pips risk )

short GBP/USD with “stops above” 1.6820 ( 100 pips )

short AUD/USD with “stops above” 94.60 ( 60 pips )

long USD/CAD with “stops below” 1.0856 ( 100 pips )

long USD/CHF with “stops below” 86.90 ( 75 pips )

The Kongdicator hasn’t “officially rung the bell” on any of these, as the technology “looks ahead” a specific number of bars / time , taking into account near term volatility and a number of other factors BUT!….I’m out ahead of this with some “general trade ideas” should we see a solid swing in USD, as early as Monday / Tuesday.

Short of that, seeing the U.S Dollar fall below the recent lows in $DXY around 79.28 would have it in some real trouble, simply extending gains in all the currencies mentioned above.

Looking at “EEM” turning lower as of yesterday ( near the “same ol area” of resistance ) also suggest possible U.S Dollar strength ( if you can ever call it that ) to come.

From a fundamental perspective, as much as the Fed wants / loves a lower USD,we’ve come to an interesting junction where ( for the Fed unfortunately ) a showing of strength is really whats needed if these guys want to uphold “any sense of confidence” on the world stage.

Most of you likely don’t realize that Russia’s “announcement” that Gazprom ( largest supplier of Nat Gas to EU ) will soon be signing a massive deal with China “priced in Yuan” was a huge reason for market concerns / risk off type action over the last couple of days as I don’t imagine “that” was mentioned in American news.

I guess J.P Morgan ( one of Americas most “trusted banks” ) shit canned earnings / missing both top and bottom line expectations too but……you know….”that” can’t have much to do with anything either I suppose.

As well curious if anyone took note of my “short Japan trade” EWJ puts / short going back to March 31st?

Once I get my signal for entry, and then begin to “actively trade” a given currency pair on the smaller time frames – things really start moving.

I’ve already taken profits on the entire group of trades entered Monday, then “re loaded” several pairs with smaller orders through yesterday and last night, with a couple of really big moves being seen – in particular the Australian Dollar ( didn’t I tell you that days ago?? ).

A quick update on activity here on Thursday as quite simply – I am sticking with the same pairs (more or less) and after a couple of days “chopping around” look to scale into re entries “across the board”.

Often what I’ll do in cases like this, when we’ve nailed the original entry so well – is take a “portion of profits” already taken – and treat the “re entries” as “bonuses”. Taking 6% in a matter of 48 hours, with next to no market exposure allows me to “mentally” approach the next trades a little differently.

I knock the Kongdicator down to the smaller time frames, and more or less just do the same thing over again as…..I’ve already got the confidence that we’ve nailed a change in trend / direction – now it’s really about “getting back in there” at the very best points that I can.

I hope you’ve been following along, and from what I understand from some of my regular readers…it sounds like several of you are making some money too!

USD has taken a little break, and several pairs present “decent shots” at re-entry here this morning. AUD has been punished hard, but I’m confident it still has further to fall as NZD also looks to be fading. JPY has certainly been stubborn but my feelings about it have not changed.

We are literally….soooooo close to a larger scale correction – you can practically smell it.

A full ten days here in January and I’ve placed a couple of little “feeler traders” here and there, but for the most part haven’t made a single “move” of any real size / conviction. The investment environment has been volatile yet “directionless” as even today ( with the “even worse than expected data” out of the U.S – surprise , surprise there Kong ) we still find ourselves “hovering” around the same levels, with currencies taking people for big rides in both directions, and plenty of questions still hanging in the air.

I think you know where I stand.

The idea of “recovery” in the United States is ridiculous, the stock market is a complete and total fabrication, the idea of “tapering” sounds more ridiculous by the day, and I expect to see global growth “slowing” moving forward.

It’s “the timing” that will be key in order to keep pulling profits.

We’ve still not been given a clear signal as to “what’s gonna happen” when we see risk come off, or even if the Fed will “allow” risk appetite to wane as…….you wonder…at what level would the Fed immediately step back in to prop up markets? ( Gees….I’m already looking “that far ahead”.)

With continued concern as to “which way will USD go”? I remain focused on the “known/obvious” correlation between Japan’s Nikkei and the Yen ( trading inversely as expected ) as opposed to getting caught up in the confusion surrounding USD, and the next turn in markets.

I don’t want to get long USD – but I will if I have to.

I’ve over road signals produced by the Kongdicator these past few days as yes….signal fired “long JPY” on several other pairs other than just AUD/JPY, but I’ve approached this with caution, made a couple tweaks and have now “extended” the entry time “x factor” further away from the time signal is initally issued. So far that has kept me out of markets longer, but also out of “chop” a full 2 or 3 days longer so……an improvement in my eyes.

It would appear that the cold weather system crossing the United States has frozen U.S traders dead in their tracks. Frankly I would have expected a bit bigger “welcome to 2014” type day here, as most traders “should be” back to work.

Stuck sitting in an airport then are we? Yuk. That’s no fun for anyone.

Well…..traders in Asia have certainly hit the ground running, as the good ol Nikkei tanks an additional -225 now down -550 in just the past few trading days. Not exactly the “best start” to 2014 there, as the 16,000 level continues to generate significant resistance. Inversely we are “finally” seeing constructive shorter term charts in JPY strengthening and possibly making the turn.

We all know what continued Yen strength suggests with respect to global appetite for risk right? I’ve been over it about a million times.

There’s really nothing you can do on days like these as this as the Kongdicator is a “hair away” from triggering “short risk ideas” but still not quite there. Knowing full well the Fed is still sitting across the table from us ( as well the Bank of Japan ) now is “still not the time” to jump into anything head first but…….the odds are increasingly in favor of correction.

We know BOJ is gonna print more in April so……in a broad / general sense it makes the most sense to me that “even the U.S Fed” could just as well “allow” markets to correct through the first quarter, all-knowing the printing presses will just crank back up late March.

Actually….it makes perfect sense to me. Get a well orchestrated “dip/correction” in now, with the obvious intention to just ” reinflate” right around the same time as the BOJ. Bring in new buyers on the dip, continue to pedal the “recovery story” and grab those last few stragglers that still have a couple bucks left in their accounts.

Very constructive moves in Yen, but still not enough to get me into the trade ( Kongdictor says we look at things in aprox 12 – 24 hours ). Watch for Tweets over the next day or two as I imagine we’ll get a trade signal initiated.

The Kongdicator has obviously taken its signal as I’ve entered like “a million trades here” as of now including to start:

short: CAD/JPY

short: AUD/JPY

short: USD/JPY

long: EUR/USD

long: GBP/USD

long: EUR/NZD

long: EUR/AUD

There is no question that in the immediate “inverse” effect of a tanking U.S Dollar is a rising EUR, so that’s a given. GBP strength along side ( geographically speaking ) makes continued sense, and it’s hard to expect much out of the commod currencies as risk comes off.

USD/CAD still hovering but will likely make it’s move lower here as well.

JPY is a tough nut to crack, and I won’t be surprised to see it put up a larger fight but…..short term trades with a quick hand / ready to jump look to be worth a shot.

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I’ve had signals initiated to get short /ES ( SP500 futures) under 1685.00

With U.S data on tap here in the next 30 minutes, I would obviously wait until “after the dust settles” to consider any type of entries – with increased volatility surrounding Thursday mornings news releases.

Current positions:

Entered short CAD/CHF on Sept 8 at 90.00

Entered long EUR/AUD ( Insanity Trade ) on Sept 9 at 1.43

Entered long EUR/NZD ( Insanity Trade 2 ) on Sept 19th at 1.6260

Entered short CAD/JPY at 10:51 a.m Sept 25 at 95.81

Looking forward:

There is no question that I’ll be getting entries in the following pairs within the next 6 hours, so ideally at any price level “higher” than we see as of this moment.

short AUD/JPY

short AUD/USD

short NZD/USD

short NZD/JPY

In general , we see the trades to reflect a “risk off” scenario , with strength to be seen in both USD as well JPY, and weakness in commodity currencies.

Now keep in mind….when entries are given, the buy/sell orders are places “x” number of pips above or below that value in order to be picked up ON MOMENTUM.

Have I ever had an instance where the entire set of orders is missed/ not picked up – and the market has moved considerably in the other direction? Maybe a couple of times – but that’s a good thing, as we look to catch MOMENTUM in our direction of choice.

No MOMENTUM – NO TRADE = SMART TRADE.

More this afternoon, as trades in several other pairs ( including those with EUR as well GBP) look to materialize.

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It’s really no suprise that “The Kongdicator” has now tripped, and will produce entry signals within the next 24 – 36 hours.

I’ve done some tweaking here over the past few weeks in that – I’ve been “a touch early” with the initiation of new trades recently, and want to get this dialed right in.

As the system is “forward looking” I plan to post / alert to the exact trades that the Kongdicator suggests in real time during the trading day tomorrow.

I will outline each specific pair, as well perhaps a couple of stocks / indexes ( as I run it on /ES SP 500 futures as well) so that you can get a real look at some specific entry levels – and follow along with a couple of trades.

The Kongdicator always suggests / places trades “above / below” the signal as these trades are then picked up “if/when” momentum moves in their favor.

I hope to get some feedback on this ( hopefully constructive ) as we move closer to making the indicator available to all.

Across the board I have a number of currency pairs signalling a trade, but each with it’s specific time / price so……I’ll plan to tweet as well post several times if need be, so that we can get a look at this in real time.

The Kongdicator is truly a thing of beauty, and a product of literally “1000’s of hours” logged staring into the dark soul of my “evil computer monitor”.

Computers have no heart..no compassion …..and will gladly steal your eyesight at a moment’s notice ( given half the chance) but NO!……not in this case – as we survive “unscathed” – Kongdicator in hand.

The Kongdicator Rules Forex Kong.

I am a fundamental trader at heart – looking to “ride the waves” as “planetary monetary policy” shifts and evolves. I look to long-term charts FIRST and then look to the Kongdicator to get me “in and out” on the short-term “ebb and flow”.

We’ve now proven it’s worth in equities markets as well – nailing the last several turns “literally to the day”.

We all need to improve on our trading. We all need a plan.

The Kongdicator “is” my plan.

It’s like this…..I’ve been working on this for years, and have always been taught / learned that – “you need to stand up for what you believe – and never let anything stand in your way”. So……..there it is. I wouldn’t get so excited about it if I didn’t feel I could stand behind it.

FOREX KONG’S DISCLAIMER

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial adviser if you have any doubts.